Interesting that so many threads start to converge. A few days ago I posted with a picture of Joe Kennedy. Now we have people talking about "Joe Kennedy moments." Here is a fine description. Legend has it that Joseph Kennedy, father of former U.S. President John F. Kennedy, avoided Wall Street's 1929 crash thanks to a shoeshine boy. Just before the market collapsed, Kennedy received unsolicited stock advice from a young man polishing his loafers. Kennedy, the story goes, got out of the market the next day, figuring stock enthusiasm had run wild.
walt526 had a Joe Kennedy moment at a New Year's party last winter. One of his wife's friend-of-a-friend was talking about how he had just started a hedge fund to "arbi-whatever" between the Euro and the USD. Guy looked like a modern day Jeff Spicoli too. He knew then and there that our country was headed for some dark times.
My Joe Kennedy Moment was Oct '05 when my housekeepr told me in broken English that she was buying a house for 3x what we paid for the house she had come to clean.
What was yours?
81 comments:
First? Slackers!
MURST
I have to say, I haven't ever had a sudden Joe Kennedy moment. With the tech-stock bust, as well as the housing bust, it was more an accumulation of data.
That said, when in 2005 or so I started hearing couple after couple here in the DC area tell me they were buying vacation properties not specifically because they want to vacation in the area but because it would be an investment, alarms went off.
P.S. Murst and liverwurst, too.
Doh, flailing! OK, you get murst.
Ive had a lot.
2004: 10 people sit around me in cube farm. 6 of them buy a house that year! For realz! dats 60%
2004/05 same office: people quiting good jobs to build spec homes. people going 'halsies' on rental condos in LV/AZ. People who rented for 15 years crawling out of thier hole to pay 700k for crapshacks.
I didn't have a clear-cut moment. For me, it was a slow realization over the course of many months as I watched the ever-increasing spiral of house prices, and saw all the ads I was seeing for magical "adjustable-rate" mortgages. Those ARMs kept nagging at me -- my family's been in real estate for decades; 'what goes up must come down' was a commonplace before I hit high school. Gambling on continued housing market appreciation just felt wrong.
Eventually, I ran across some descriptions of I/O neg-am loans and I realized that there was no way this was going to end well for the people involved.
How is it that such a tiny house in Compton has such a big kitchen and dining room? Surely the Realtor wouldn't do anything misleading, like distorting the pictures?
When I looked into buying a place half as good as my rental, and realized that the carry costs ex insurance an maintenance was 4x my rent
I had mine when a mortgage broker told me that I was crazy for buying a house that was "only" 250k. I make 6 figures and qualify for more than twice that so why not buy more? I kindly explained to him that SOME of us do not want to be slaves to a house payment. See there are these other priorities like retirement, investments and college funds. We also enjoy eating and the occasional vacation. Debt is not cool I explained to my ignorant friend.
Watching prices of homes in the area triple in 4 years. That was enough for me.
Damn Dawg, can't keep up with you - here, once again, is Sweet Cashback's revenge - I have already made my report about IAFF:
Ara,
Since that article Google has made it much easier to report paid links:
Report paid links
When working/renting in a Boston suburb, a FSBO was handing out fliers in my neighborhood trying to sell a rundown duplex for "only" 2-3x the appraised price. I stood there thinking, "Who in their right mind would even consider paying more than the appraised price for a house? Much less 2-3 times that amount?!?!" That was 2003, and I thought things were already beyond crazy. Little did I know ...
LAWNMOWER MAN...
how about a challenge?
ill short the domain 10% everday until its sold even if it gets down to one dollar
https://www.tdnam.com/trpItemListing.aspx?&miid=7719233
My moment was when I was first considering buying a place, and I looked around and was told by a mortgage fellow and my real estate agent (who up until that point I thought was pretty decent) told me and my friend that we could afford a place that was 7x our combined income.
On an IO 5yr ARM.
I bolted.
I've heard that legend differently.
It wasn't Kennedy,(he had sunk all his rum-running Seagram's booze money into Boston mortgages and Hollywood by that time hadn't he?), but a New York heavy-hitter who overheard his gardener and the neighbor's scullery maid exchanging stock tips.
I've had lots of those moments over the years, on lots of different subjects.
The common denominator is the Press. When what is mesmerizing the access asskissers in the Trades magazines spills over into the pig-shampoo mass-market media's latest "Thing", it's nearly by definition, WELL past it's prime.
The fella who wrote "Liar's Poker" had a great term for it:
"The Harvard MBA".
precious roy:
"I stood there thinking, "Who in their right mind would even consider paying more than the appraised price for a house? Much less 2-3 times that amount?!?!"
I feel that way when I look at the P/E ratios in the stock market.
In that context, a 2/1 or 3/1 for a material something OTHER than a piece of paper with "stock certificate" written on it in fancy script seems almost sane, y'know?
nova sideliner:
Three words:
"Falls Church Gulch"
You should know what I mean.
CSL, you need to improve on your mad IT skillz. Here again the link: Report paid linkz to Google
My moment for housing?
"Home $weet Home" on the cover of Time.
Happened at the same time as a guy I went to school with, one of the smartest financial cookies I know, bought a townhome in LA. Three mortgages to make it work. Almost no down payment. His statement to me at the time "I don't need the market to keep going up 20% a year. I'm fine if it just returns to normal appreciation." Not even the slightest bit of recognition of the fact that a flat market, or even a down one, might happen. Really smart people getting pulled into doing stupid things is just as good an indicator as really stupid people looking like geniuses.
(In the end he was bailed out, in part by the fact that his job took off and his income doubled, in part because the small movie that his wife had a small part in really took off and she got a fairly nice payoff. Otherwise he'd be somewhat screwed right now.)
-btc
Is it any wonder why sweet cashback is so popular? Sadly enough, I will never reach the pinnacle of IT skillz that are favorite dooshbaggette has.
(p.s. why didn't the damn thing link??)
@Casey's Sex Life -- are you still lonely? -- it goes like this:
<a href="https://www.google.com/webmasters/tools/paidlinks?hl=en">Report paid links</a>
in your google reports, be sure to include the link to the "smoking gun" where Casey spells out his prices...
btw -- "blowback" from marty's troll army: many, many haterz were forced to get Google accounts (which you need to report Casey).
http://iamfacingforeclosure.com/advertise/
Yep to King Friday. Google likes it when the evidence is easy to find.
Point out also that "Last 5 Supporterz" are also paid links, sold from here:
http://iamfacingforeclosure.com/supporterz/
Just reported all of them.
Cut, paste, enter, page back. Repeat until done.
In August 04 my secretary bought two condo's for investment purposes. Just before Hurricanes Charlie, Frances, Jeanne, Ivan etc. She's sold one and rents one out that covers her nut, but her tenant drives her crazy.
My wife and I had our first child and decided to talk to the super about how much other apartments, namely 2 bedrooms. When we looked at one total garbage-hole that cost a fortune we started to wonder. A quick check of selling prices on one beds in the building had us clear doubling our money after living there for 2 years. We sold the apartment on Craigslist. it took two weeks. Despite some terrible family crises and resulting financial woes, we still have what we started out with- actually about 10% more. I've been a bitter renter since...but my landlord is looking to take an increase this time next year, so that may be the time that we finally see some dealz in NYC.
And BTW we sold in '04. A bit early, but in this situation we were more than happy to lock the gains in early. The stock market has done the rest.
O.k., so if money's flowing out of RE, what will it flow into?
On a related note, population is still increasing nationwide, despite Gary, Detroit, etc.
"O.k., so if money's flowing out of RE, what will it flow into?"
Nothing here in the U.S.
HEHEHEEHE!! What are the chances of Google shutting down IAFF? Is it even possible?? And yes LMM,
"I have searched the world over and thought I found true love - but he found another and poof! I was gone!"
{with my virginity intact)
Anon:
"... what will it flow into?"
I'm guessing inflation.
Big government bailout...pay off yesterday's real and durable goods with tomorrow's cheaper dollars.
Maybe it's time to start shorting REITs. Get into some Euro funds?
Found a video of Mocha helping Snowflake pay back every dirty panty. G has a guest appearance.....
Every dirty panty
"Who in their right mind would even consider paying more than the appraised price for a house?"
When emotions rule, that's when. Some people, myself included, have made purchases that defy logic and a fundamental assessment of value. In my case, it was a rarity, but I have to confess I did and have never regretted it.
My “Joe Kennedy Moment” happened almost 30 years ago, back around 1987. A good friend of the family had started a venture called Candy Stripers Candy, where scholarships were granted to the hospital volunteers known as Candy Stripers (very popular with young ladies in the 50’s through 70’s).
The company’s primary business was candy manufacturing; had just received SEC clearance to begin offering stocks, was hooked up with the right national hospital organizations, had a killer business plan, and even had multiple USPTO registration grants for various company marks/logo. Everything looked very slick, well thought out and professionally managed.
At the time I had a bit of discretionary capital, so I made plans for an investment. After all I knew the principles, most everyone who knew them was investing heavily, and the deal looked like a winner. Help volunteer Candy Stripers while selling candy through hospital gift shops. But then I mentioned my intent to a young Intern I was seeing at the time, and she asked if “Candy Stripers” were still around? So I thought if a young Doctor wasn’t aware of this volunteer effort, maybe there was something missing here.
Long and short after more research I passed on the deal. A year later the company declared Chapter 11 and never recovered. Funny how just the slightest thing can trigger larger events that we may not see at the time, because I’d have lost a small bundle (for me at the time) had it not been for an occasional date’s simple question.
~Mark
Cool, I inspired an EN entry.
Just got off of pcworld.com where they have "100 Blogs We Love." Thankfully, Turdflake's blog was not among them. Unfortunately, neither were EN or HBB...
"O.k., so if money's flowing out of RE, what will it flow into?"
It's an interesting question. I think that we first need to figure out how much real wealth was lost and how much phony wealth is no longer recognized in any form. The bitch about leverage is that its just as effective at destroying wealth as it is in creating it.
BTW, PC World article can be read at:
http://www.pcworld.com/article/id,133119/article.html
"My “Joe Kennedy Moment” happened almost 30 years ago, back around 1987. "
That would be 20 years ago. :)
Who is paying for dickhead's plane ticket from Newcastle to Sydney?
From Serin's latest post (sorry my mad IT skillz don't know how to do italics):
"Blogging from Newcastle airport. Will be in Sydney tomorrow for a couple of days trying to catch an interview or two. I promised to start calling my lenders, now that I have income. I need to get a new Skype headset for that. Anybody have one to spare?"
Yeah dude, I have a spare Skype headset, you begging asshole. Just not for you.
Last Spring when I switched jobs my aunt suggested that I buy a house right away. I told her no way, when a POS 1 bedroom condo costs $300k in Irvine. She then suggested that I buy and share a house with my brother. Back then he worked in Pasadena, and I'm in Newort Beach. Our parents' home is in between the two places in eastern LA County..I might as well live at home. Most importantly, my brother lives like a pig and I don't want to clean up after him. This aunt is a cafeteria lady at some elementary in Jersey...
Another aunt told me to buy land in California city. This aunt does manicures and is based out near Boston.. She use to brag about how her empty plot of sand was racking up equity. She wasn't so cocky when she visited early this year.
Last June a friend, who also is an entry level aerospace guy like me, asked me why I don't buy, and proceeded to give me the standard NAR bs. This friend and his twin brother work for the same aerospace company and pays the 620k IO mortgage on their parents mcmansion out in Corona. My friend lives month to month and has multiple payments. Thinking back now, same friend had to get financing to buy a notebook computer..
Now, the friend's twin decided late summer last year that he needs his own house. So he and his fiancee buys a condo in Lakewood for 465k or so, zero down. At the end of each month, the couple saves a whopping 500 dollars. These two combined make at least 150k a year (the fiance is also aerospace). A month ago these 2 decided they don't want to save 500 a month anymore and are now living month to month...and probably carrying credit card debt.
I've visited both their parents place and the latter twin's condo. Both POS, especially the condo. The layout was crap and definitely not worth the asking price. What's scary is that their work had a 20% budget cut or something, and I suspect they are only going downhill. It's not really a company, as they are managed by a certain elite university and their work caters mainly to a gov space entity.. The space entity isn't getting that much funding lately..
After hearing all the bull housing talk last year, I started digging and found various blogs. It led me to HBB, then to KC's site, then to here. I'm just sitting on the sidelines watching the drama unfold with popcorn in hand =D
@Sharky: "Falls Church Gulch"
The Gulch? Is that the section with completely overpriced little boxes, like $700k for 1800 sqft? Don't know anyone who lives there... but some who are close and paid similar prices -- almost California prices. But unlike California, in The Gulch you can get some really nice shade trees.
eek:
"This friend and his twin brother work for the same aerospace company and pays the 620k IO mortgage on their parents mcmansion out in Corona."
Would that be Corona, CA?
There are McMansions in Corona?
That noise you heard was my jaw hitting the floor.
Granted it was twenty years ago, but Corona used to be a blahhh little town. I used to ride a motorcycle,very fast, through it every weekend.
Animals mating in the streets at mid-day.
And, IIRC, it smelled kinda bad too.
THAT Corona?
My moment was in the last year when family decided to buy a second house to live in while renovating the first and talked of then renovating and flipping the second house.
I told them that I was nervous the housing market would be going down and they were buying at the height.
nova sideliner:
"The Gulch? Is that the section with completely overpriced little boxes, like $700k for 1800 sqft?"
Let's see...south side of Arlington Boulevard, behind Loehmann's Plaza.
Pimmit Hills section is essentially the same, if it hasn't been torn down by the Tyson's Corner Tumor.
Post-war "Vajanya Levittown" developments.
Every conceivable modification to a cinder-block no garage, 2Bd 1 Ba, Kitchen in back Cape Cod known to mankind.
Yep, I know some folks who live "DowntheGulch"...and they don't even speak English as a second language!
700k? Not to me, bruddah. I moved over the Ridge.
I get to join the locals on Saturday night watching the traffic lights change colors.
Fairfax Cow-nee is a victim of it's own success.
Oh crap. The little women is reading EN right now and doesn't appreciate the way that I characterized that fellow. "I think he's actually quite bright" was her response.
Sigh.
DONT GIVE THAT BITCH ANY CLICKS. ENJOY!
June 25th, 2007 6:26 pm
Foreclosure, Real Estate Agents and Me
Australia travel update: Blogging from Newcastle airport. Will be in Sydney tomorrow for a couple of days trying to catch an interview or two. I promised to start calling my lenders, now that I have income. I need to get a new Skype headset for that. Anybody have one to spare?
Foreclosure, Real Estate Agents and Me…
I was interviewed by Trevor Smith of BlueCollarAgents.com about my experience with real estate agents. I ended up writing lots of juicy details and lessons from my foreclosed deals so I wanted to share the full interview here.
Last time I wrote about real estate agents I pissed off a few (didn’t mean too). Hey, I’m just keeping it organic.
Enjoy:
1.) When you were in the process of buying your investment Properties how many real estate agents did you work with? How many did you work with while you were trying to liquidate your properties?
I tried many different things. Some homes I did FSBO, some I listed with agents. I worked with probably about 3-5 different agents. I’ve also had some homes where one agent didn’t work out and I got another one.
2.) Did the agents that you worked with while purchasing your properties know that you were buying 8 homes? If so, what was their reaction?
Most of the properties I bought where not doing through an agent. I like to buy direct from the home owner. I did use agents to buy 2 properties I think. They both knew I was an investor and have other properties and plan to buy more. They didn’t know anymore than that.
3.) What kind of advice/warnings did your agents give you about your investment strategy?
They didn’t. They just presented the properties and sayed how it would be a good deal.
4.) What was your best experience with a real estate agent?
Best experience was with the agent who attempted to help me short sale one of my properties. She was one of the few in the area who had the knowledge and experience to do this and she worked VERY hard. Unfortunately as often happens with short sales, it got denied by the bank at the last minute. That was after MONTHS of work. I appreciated her efforts very much.
As an investor I know how to do short sales myself and I know its not easy. The most time consuming part is being on hold with the lenders every day to try to hurry the decision along. It can get very frustrating because the decisions are made by a committee.
The agent kept me informed about everything and was not only professional but also sympathetic throughout the whole time. I would recommend her to anybody facing foreclosure in Sacramento area who wants to sell on a short sale.
5.) What was your worst experience with a real estate agent?
Worst experience was when I hired a young lady to be my agent on the sale of my Dallas property. Asked her one simple question. “What price would you have to price it at in order to get this property under contract in under 30 days?”. The project was already over budget and I couldn’t afford to keep making payments. So I needed a quick sale. Hence my challenge to the agent.
So after she gave me a price I asked another simple question: “Would you be willing to do a 30 day listing agreement then?”. That was to have her put her money were her mouth is. She agreed, saying that she’ll have no problem in getting a purchase contract in under 30 days. I had a feeling that she just wanted my business though.
That feeling proved true. After a few open houses and other marketing efforst on her part she still didn’t have anybody interested in buying. Right around the 30 day mark I decided to give her a little bit extra time on the contract. However, she started complaining about the houses still needing repairs done and something about the trash that was left out for too long.
That was trash that my contracts forgot to clean and it was taking a little longer to get in contact with them. I’m in California at this time and wasn’t able to baby sit the contractors. So it was taking an extra week or two to get the trash removed. Plus the trash was not on the front of the house. It was on the back and it was neatly off in the corner. We’re talking just some construction materials and stuff like that OUT OF VIEW from the street.
Ok I’ll give it to her on the trash, a little bit. However, when she starts complaining about the house having features that make it hard to sell, that really got me. She has seen the house several times BEFORE signing the listing agreement. She came to my FSBO open house and had a good look around. So she knew full well what she was getting into.
All in all, I don’t hold it against her, too much. I think she just overpromised and realized she could’t sell it in 30 days. I just wished should would be honest about it and not try to make up lame excuses.
6.) Did you ever have a moment when you felt that an agent talked you into a real estate deal that wasn’t in your best interest? If so, how did he/she do this?
Yes, kind of. On this particular deal I got 50 grand cash back at close built into the package when it was presented to me. Out of the 8 deals this was the biggest amount cash back. It was packed and actually advertised as $50,000 CASH BACK AT CLOSE deal in an email that went out to members of this investment club that I was a part of. Well at that time my deals where already not looking so good and I need to raise extra capital to finish repairs and pay mortgage payments. It was too good of a carrot to pass up. So I took the bait and went for it.
The deal was already under contract by another investor (working in conjuctions with the agent) and they where offering an assignment of contract for an upfront NON-REFUNDABLE payment of $7,000. With that payment I would have the ability to close on this deal with my own loan and get my 50K.
Here is where I think the agent could have done a better job. They knew I was a beginner investor/flipper and I feel they could have done a better job making sure I was aware of this deal being more or less a trap. Here is why. The appraisal seemed kind of inflated but they justfied and said it was legit. They low-balled the list of repairs.
And they didn’t explain to me that in this neighborhood, there would be no where I would be able to rent out the house for what my 100% finance mortgage payment would be. IN fact I would be in the negative over a thousand dollars per month. They said I can probably do a lease option and get more per month but still it was a short sighted deal.
Yeah I would get the 50K and but would never be able to resell it for what I bought it for, EVEN after sinking 10-15K into repairs (I believe that was their estimate).
Here is where my fault came into play. I trusted the agent too much. Yes, we DID the a home inspection but I never bothered to look at the property before buying. I was traveling at that time I believe doing a deal in another state. So I had the agent let the inspector and and get the report back to me. The agent walked the whole house with the inspector and she later reported her findings to me. I feel they were still kind of low-balling the repairs but I didn’t find out until I later looked at it with my own contractor. So I made a mistake there.
OH and by the way… Hehe.. Did I mention that agent also acted as a mortgage broker on this transaction? I should have never done that because it create a conflict of interest. Who know what they may have been telling the lender just to get this deal done. So the agent made commission on both sides of the transaction. And then there was the 7K assignment fee that went to the original investor/buyer on the contract that was assigned to me. At least I think that’s where that 7K went. I really don’t know.
It was a pretty crazy deal to say the least.
7.) What would you say was the average commission you paid (or agreed to pay) agents to sell your home during the pre-foreclosure/short-sale process?
On a short sale I didn’t have much of a choice because the bank kind of determines what they are willing to give to the agent. Since they are losing money they try to low ball the agents too. Even though the agent works 3 times harder on a short sale with less of a chance of selling it as a regular house.
I believe the bank was ok with 4% or 5% split between both agents. So the poor agents where definitely worked for less money and higher risk on these deals. That’s why I appreciate any agent that is willing to do a short sale.
8.) Did you ever use or think about using a discount agent to sell your property(ies)? If so, how did they do for you?
Yes I tried a discount agent or a flat-fee listing agent a couple of times. For example paying only a flat fee of $250-500 to get listed on the MLS and I do all the work. I’ve had some good experiences and some bad. Overall I would only use a flat fee broker if I have the time/money to do all the marketing myself and the market is favorable.
Yes, you save on the fee with these brokers but if you don’t know anything about marketing or selling real estate it’s a very bad move for an average home owner and beginner investor (like myself). In a down market it’s even worce because your inexperience will show even more.
Also putting up your own marketing dollars coupled with lack of experience could cost you a lot more in the end. A good and established real estate agent already has the connections and the experience to move a house quickly and they pay for their own marketing usually. You as a homeowner/investor don’t have to put anything up except a larger commission once the house sells.
I would recommend most people stay away from flat-fee or discount brokers. Unless you know what you’re doing or willing to pay for a learning experience (which could end up being not so fun in the end.)
My follow up…
I read the interview again and I realized I’m coming across as knocking “discount brokers”. I was specifically talking about “Flat-Fee brokers”. Hopefully that makes sense.
Discount brokers - meaning brokers that provide FULL service at a discount price - is a good thing. Because it creates competition in the industry.
FlatFee brokers are doing a good thing too because they are giving people an option to do their own marketing and simple put you into MLS.
I just wanted to warn people that Flat Fee brokers is not always their best UNLESS they are knowledgeable in the RE sales process.
But overall its great to have more choices in the industry!
. . .
Again, thanks to Trevor Smith of Blue Collar Agents .com - a blog about discount real estate brokers & agents.
. . .
Question for everyone…
How Can I Building a Network of Short-Sale Friendly Agents to Refer People in Foreclosure?
I get people all the time emailing me and asking me to refer a good local agents to do a short sale. I need to have a systematic way to help these people.
Of course, I want to get referral commissions from this or a marketing fee (whichever way we can do it legally).
However, more than money I want to actually HELP these people in foreclosure and refer them somebody who will treat them right.
Any ideas?
Reliance on buyers' RE agents
=============================
In the UK, most people buy houses without the assistance of a RE agent. Sellers will usually use an agent (or possible multiple agents).
I've never understood why people in the US think they need an agent to help them buy properties. The buyer's agent's motivation is largely directly opposed to what the buyers need: the agent wants a quick purchase, and the higher the price, the more commission the agent will get. Since the buyer's agent is paid by the seller, can one think of a scheme better designed to put an agent in conflict with the buyer's interests?
In the UK, commissions are more like 2% (that's the total commission, since there is no buyer involved). An agile society needs to make it easy to move, including buying/selling houses. 6% puts people off this (and I suspect adds to gasoline usage). Of course the effect of CA's prop 13 on property taxes is another factor encouraging people to commute rather than move.
Standard 6% commissions across the country are just ridiculous -- does it take 3x the effort to sell a similar size house in CA than in TX (where there might be a 3x difference in price)?
walt526 @ 7:02 PM:
”That would be 20 years ago. :)”
Too funny, now I know I’m tired! (Been taxing my brain all day with various stuff, so go figure?) Thanks Walt, gotta laugh at the humor getting older. ;)
~Mark
BTW folks just submitted the below to Fliptardian’s site, but don’t anticipate he’ll allow it to post:
**************************
Casey Serin:
”How Can I Building a Network of Short-Sale Friendly Agents to Refer People in Foreclosure?”
If you have to ask the question to your blog patrons, what makes you think you’re qualified to determine what makes a proficient short-sale facilitator? NOTHING! We’ve spoken at length about this and related aspects, remember Casey? The only thing at which you’ve any credibly, is losing properties! Why then do you persist to attempt fooling them whom know no better, into thinking you’ve some other level of Real Estate expertise? To do so is fraud, more of it! Yet you continue to promote and perpetuate unlawful conduct and methods, despite my repeated insistence that you seek a lawyer’s confirmed opinion.
Clearly you haven’t, otherwise a whole lot would be different!
As for “just keeping it organic?” Please! Some of us know better how you and your comment-coolie have been selective against more critical comments posted, deleting (or refusing to post) those that don’t fit into your narrow and defective paradigm of where you think this blog is going! Stop it! You’re embarrassing yourself!
~Mark
(Daring Casey to post this one.)
Joe Kennedy moment 1999 -
Worked at a Dot Com and a coworker cashed in his stock options to be an "angel investor" in a "neat company" doing "neat stuff" in sales search engines.
Ok I thinks to myself... self how can this dot com thing continue when they (the big money guys) are needing novices with <100k in assets to get startups off the ground?
So I sold all my shares in technology and missed the run up to March 2000 AND the BIG DROP
Joe Kennedy Moment 2001
Dot Com I worked at imploded Aug 2001 - I go to the coin store to shop for some silver dollars. A rather old fellow next to me is saying he's buying all the Gold he can... Says he lives next to 5 software salesmen that are all out of work... So now is the time to buy Gold. (Turn out right on Gold but wrong on the sales guys.)
Joe Kennedy Moment 2005 -
Move to a large metro area. Rent a house because we fear that selling the house would take a while. We rent the house for $1800 I do the math and search the county records. The new landlord (he bought the house 6 months before we moved in) had to be paying about 2500 in P&I, Insurance, Maintenance etc... Of course I sign him up for an 18 month lease :) Funny after we moved to our purchased home the landlord got forclosed on now the home is owned by a corp in another state and seems to be a "clown house"
Hey Mark (LossMitPro) -
Did you catch this little priceless gem of dickhead's:
"As an investor I know how to do short sales myself and I know its not easy."
I almost had a hernia laughing at that one.
@sharky
Yes, it's Corona, CA. You know it's a mcmansion when the living room doesn't have a vaulted ceiling for the 2nd floor balcony to peer down. Ugly layout.. I don't think my friend stays at that mcmansion much. It's mainly for his parents to retire in. Why 2 people need to retire in a 5 bedroom house is beyond me. His dad came here from China to retire 2-3 years ago. Why anyone would move from a low standard of living country to one of the highest in the world to retire...is beyond me.
I happen to know another person that bought a mcmansion out there last year for 600k. This guy commutes to Costa Mesa to work. That 91 freeway sure is nice when it's traffic hour 24/7 (i've seen cars backed up on that freeway at 10pm). But this guy never made any sense. Prior to moving to Corona he was renting in Costa Mesa while paying the mortgage to his townhouse in LA County..which he meant to sell but ended up sitting empty for the year he rented in Costa Mesa.
"How Can I Building a Network of Short-Sale Friendly Agents to Refer People in Foreclosure?"
You can't. Any agent who would partner with you is just trying to scrape a lead or two from the bottom of the barrel. Most likely, such an agent has very little to offer in the way of experience with short sales or otherwise. On the other hand, any agent with actual expertise in this area would want nothing to do with you.
"I get people all the time emailing me and asking me to refer a good local agents to do a short sale. I need to have a systematic way to help these people."
How would Turdflake know that since he hasn't checked his email regularly since March?
"Of course, I want to get referral commissions from this or a marketing fee (whichever way we can do it legally)."
So basically Turdflake wants some inexperience shill of an agent to pay him a couple hundred bucks for the privilege of the contact information that some poor sucker was foolish enough to send an email to Fucktard. Is that basically the scope of the business plan?
"However, more than money I want to actually HELP these people in foreclosure and refer them somebody who will treat them right."
Bull-fucking-shit. Turdflake doesn't give a rats ass about helping anyone. He just wants a couple hundred bucks for forwarding an email. What a looser.
Any ideas?"
eek:
"His dad came here from China to retire 2-3 years ago. Why anyone would move from a low standard of living country to one of the highest in the world to retire...is beyond me."
Because you and I are going to pay that old bastard Social Security benefits...that's why.
Oh, what's that you say? He never paid into the Social Security system, working his life in China, (and prollay a Commie to boot)?
Ha-ha...silly you! He'll get approved for all the Geezer benefits before a native-born bog-hopper will.
I've seen this happen. Immigrants bring over "O-Mah", who had a career as a "yurtwife" to a goatherder.
BAM! Medicare-MedicAid!
BAM! Section 8 Housing Assistance!
BAM! Social Security!
BAM! State and County "Kiss the Ageds' Asses" Subsidies!
BAM! AARP Membership!
BAM! Senior Discounts!
You mark my words...
And y'know, it matters not one whit if "O-Mah"'s lousy spawn had been SAVAK agents and just happenned to flee Iran with duffel bags stuffed full of money,
and are now living high up on the hog.
Your pal's Pop will get right on the dole as soon as his feets hit the beach.
Caseys Sex Life @ 7:42 PM:
”I almost had a hernia laughing at that one.”
Actually, walt526 (@ 8:00 PM) has a very good take too. Yet I also find Casey’s ambitions humorous until I stop to think about the general mindset of people facing a foreclosure threat, which is extreme vulnerability. One (of several) reasons why California Lawmakers enacted Civil Code §2945 back in the 70’s (http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=82742625902+0+0+0&WAISaction=retrieve), and code like it, to prevent the susceptible from being preyed upon by the likes of Flipstick!
Aside from that in over two decades of dealing with, working for and consulting lenders, and advising consumers about mortgage and related debts? I’ve yet to find more than a handful of Realtors whom can legitimately determine the true elements of a successful short-sale. The overwhelming vast majority of Agents only have a cursory knowledge of the practice, and focus far too much on making the sale rather than engaging the short-sale processes correctly.
Anyway, no need to grind the fact that competent short-sale expertise is the furthest thing from Bonehead’s mind. He could care less so long as he gets his, sweeeeeeet cut.
~Mark
UK Anon:
"Since the buyer's agent is paid by the seller, can one think of a scheme better designed to put an agent in conflict with the buyer's interests?"
Huh? Unless there's something wonky going on in the UK, this isn't making any sense.
The Buyer is paying the Buyer's Agent.
The Buyer is also paying the Seller's Agent.
The Buyer is Buying the Seller's property.
The Buyer is the guy or gal at closing who is passing out the money.
Everyone else is pocketing the Buyer's money.
Is it different in Britain? Does gravy flow uphill there?
"The buyer's agent's motivation is largely directly opposed to what the buyers need: the agent wants a quick purchase, and the higher the price, the more commission the agent will get."
Uhhh, yeah, dude. Everyone at the deal EXCEPT the Buyer has a vested interest in seeing the bell ring at the highest possible price.
Once you get clear in your mind that you, as the buyer, are paying everyone else involved, this shouldn't be all that hard to remember.
FWIW, I used a buyer's agent, and am glad I did so.
Of course, I was buying a Home first and foremost...investment way way on down the list.
Having a nice place to live isn't perfectly quantifiable in market terms, is it?
@Sharky:
So when you bought your house, you wrote a check to your agent?
It is my understanding that the seller contracts with an agent, at a percentage of the eventual sale price (4-6% normally) and then, this commission is split between the buyer's and seller's agents. Correct? If so, it is effectively the seller who pays the agent.
Why else do buyer's agents market themselves as costing the buyer nothing?
Corona was the area I was referring to in "saw the price of homes triple in 4 years"
I have a place in Santiago Canyon(Green River Rd). Most homes in this neighborhood are 900k+. There's several in the view that sold for a few million. 1 bd condos start at 340k.
They're not anywhere worth the price people are paying. Much better deals and better environments are found on the other side of the mountain in OC.
@Sharky
I know exactly what you mean, because my own grandmother is guilty of that. She has never worked a day in her life. She got her citizenship and a few years later applied and got her social security benefits. I love my granny and all but shit, she doesn't deserve a cent. I don't like my position where I don't want to be the bagholder, yet I can't wish for her to kick the bucket...aiye. Totally forgot about this loophole until you mentioned it. I thought Social Security was putting an end to this?
"move from a low standard of living country to one of the highest in the world to retire"
Never been to China huh?
One could easily paint the United States as "3rd World" by only showing the trailer parks, ghettos, and poor farmers.
My complete lack of knowledge of the US real estate system is going to show, but here goes...
The World Wide Wanker mentioned in the BlueCollarAgents.com interview that one of his real estate agents also acted as a mortgage broker -- is this legal? At the very least it sounds like it's a major conflict of interest/unethical, not that THAT seems to matter any more.
This comment made me snicker:
"I just wished should would be honest about it and not try to make up lame excuses."
ROFL!!!! You can't make this sh!t up. Poor English and hypocrisy rolled into one short 'n' sweeeeet sentence. Who needs the TV for entertainment?
Sharky,
Read Freakonomics. (Despite the name, has nothing to do with Casey.)
Studies have shown that real estate agents typically sell their own homes for higher prices than equivalent client properties.
The apparent explaination is that a real estate agent only pockets (typically) a percent or so of the deal after splitting with the other agent, the two agents' firms, etc.
From an agent's perspective, dragging out a purchase for a few extra weeks just to get 1% of a modest price difference just isn't worth it. They'd rather close the deal quickly at a reasonable price than advise you to hold out for the best price.
Of course, when they're selling their own and they pocket close to 100% of the extra, they're quite willing to take an extra few weeks.
So it cuts both ways. Most agents would prefer to conclude the sale quickly at a reasonable price rather than drag it out for a longer time hoping for the max price and risk losing the deal altogether (especially true of buyer agents). Just like any retail business, quick turns make money.
-btc
UK Anon:
"So when you bought your house, you wrote a check to your agent?"
Nope.
"It is my understanding that the seller contracts with an agent, at a percentage of the eventual sale price (4-6% normally) and then, this commission is split between the buyer's and seller's agents."
You're very close. Six percent is the usual commission, and correct, it's usually split between the buyer's agent and the seller's agent...and they in turn have to piece off their offices.
(Apparently, everyone has to get a taste of the action).
"Correct? If so, it is effectively the seller who pays the agent."
No. The seller is going to pay his agent with the money that YOU pay him for HIS house.
The seller's agent is going to pay the buyer's agent his cut with the money YOU paid to the seller at closing
Here's the rub:
If there's no Buyer, there's no Sale. If there's no Sale, there's no Commissions...for anyone.
Without a Buyer, the agents and the seller are just some nice folks sitting around yakking about real estate.
Which is swell, but it ain't Business until there's money changing hands.
The two essentials in a transaction are a Buyer and a Seller...everyone else is basically superfluous.
"Why else do buyer's agents market themselves as costing the buyer nothing?"
Because you're going to pay a 4-6% commission ANYWAY. It's built into the price, (even for the FSBO stuff, which is a seller who wants to keep the 6% in his OWN pocket).
At least with a buyer's agent, you,(theoretically) have someone who knows the ropes, has access to restricted sales data, does the legwork,(my guy certainly did...like a terrier after a chicken bone), and can advise you on, and "ease" the process.
Since a Buyer's agent usually is also a Seller's agent, they have lots of contacts, and if they produce quality deals, on BOTH sides of a transaction, other agents and the minor players,(home inspectors, mortgage brokers,and title company people) should think twice about dicking over the guy's, (or gal's), clients.
Eatin' their seed corn, if you follow me.
The Agreement I signed was for a 90-day period with my agent.
Had I not been happy with his efforts, or thought he was shining me on, I could have let the period expire and then told him to go piss up a rope, (I'm rather good at that).
And then I could honestly bad-mouth him as a bum...that kind of publicity is POISON for RE Agents.
They earn their bread by word-of-mouth.
As it is, I've recommended him to other people, and would again.
In fact, I don't think I'd even want to DO a deal without having a licensed realtor, (at least nominally), in my corner.
For all his "Gurucation", has Fliptard ever mentioned using a Buyer's agent?
And look at the custom crack-houses HE bought.
That doofus was a Seller's, (and their agents') Wet Dream.
BtC:
"Read Freakonomics."
Done. Got it in hardcover, 1st edition.
"Of course, when they're selling their own and they pocket close to 100% of the extra, they're quite willing to take an extra few weeks."
Another aspect of the FSBO psychology is prolly in play there also.
When an agent is selling a "listing", it's just a "house".
When it's their own house, it's their HOME.
Truth be told, though, RE agents usually keep their homes in REALLY good shape...it's kind of an advertisement for them, ain't it?
So it might even be worth the extra dough than the comps.
@Sharky:
So, the seller negotiates the actual commission that the buyer's agent gets paid. Even though it is ultimately the buyer's money, it passes through the seller first.
Anyway, my basic point is that the motivation for the buyer's agent is almost directly opposite to the buyer's best interest.
I believe that buyers in the US use agents like a security blanket. But then, what do I know? I bought a house in CA that was FSBO with no agents involved. 5 years on and I still think that I got a good deal. I also believe that I better assessed the cost of fixing up the house than many others who were put off by issues that I correctly identified as cosmetic and well within my ability to fix.
Anon UK:
"So, the seller negotiates the actual commission that the buyer's agent gets paid"
Yes, in the sense of accepting the Buyer's offered price or not.
BTW, writing the offer and inserting the various contingencies ALONE was worth the 3% I paid to my agent.
Let's just say that I had pretty good selection of lifeboats, parachutes and getaway cars right up to closing day that I could have used if my "gut check" and my "head check" hadn't been on the same frequency.
Very stress-relieving at a time that minimiing stress is a very important consideration...so in a sense, you're quite right, my agent WAS a security blanket of sorts.
"Anyway, my basic point is that the motivation for the buyer's agent is almost directly opposite to the buyer's best interest."
Yes, but you should already know this, and the buyer's agent should know that you know this.
(If he doesn't, then watch the days count down and tell him to hit the bricks once his time's up...that house ain't going anywhere).
"I bought a house in CA that was FSBO with no agents involved. 5 years on and I still think that I got a good deal."
Well, hey, you know what? That's a winner, then.
If YOU'RE happy with it, what the hell does any other asshole's opinion matter?
That only comes into play when you're selling.
That was one thing that always blows my mind about those Flipper shows...these goobers would go waaaaaay overbudget on granite and stainless steel and cutting random pizza-sized holes in the walls for "Feng Shui" or some such shit, to reflect their "good taste"...and then the prospective buyers would walk in and point, laugh, and walk out the door.
When I was looking at a house, I'd go straight to the john and look at the pipes...if they were gray plastic, we'd "about-face" and move right along. That would stop the rodeo right there.
Don't care about your Berber carpeting when there's a water bomb in the walls...
My defining moment was a girl who I'd known for a while, 24-25 at the time, who moved to the Bay Area with no work record, had dropped out of college, and had been doing something illegal to get by for a while.
Landed a temp job, and was told by a mortgage broker after working there for a week, that she could qualify for a 400K townhouse in San Ramon.
I've learned one thing from the tech boom and the housing boom - when the cold callers start calling you, when the spam you get is focused on a boom, it's time to bail - the bottom feeders usually figure out their angle when the smart money has already been pulled off the table. I knew housing was close to peak when those mf-ing scumbags started cold calling me at work (how they got my work number is something I'd love to find out), telling me I was preapproved for some ungodly amount of credit.
The ones that REALLY pissed me off were the ones who'd call and say they'd recieved my mortage application, and I was approved for x amount! I stopped hanging up on them, and started having fun with them, I'd say, "Oh, really! What company is this?" I'd try and get some solid info from them, and then hit them with "I'd like your name please, and your supervisor. See, I've never applied for a mortage in my life, and I'm very concerned that this is identity theft. My lawyer will be contacting you, and I want a copy of this application faxed to me immediately..." I never got past that point before they'd hang up. I'd never get a call from that company again, but I'd say I took at least 30 of them over the last two years.
Lately it's been the calls where there's 20 seconds of silence, and then some "investment news" bullshit to sell some mortage brokerage or something - I havent had time, but I have a few stashed in my voicemail, and I'm going to listen to the spiel, get a number to call, and start spamming them with other companies bullshit. A couple of calls like that on their dime, should get me off their call list.
It was this same kind of cold calling bullshit with the tech boom. When they get in the game, it's time to get out.
Mark, what the hell is wrong with you?
You do realize that in most of the US, "coolie" is equivalent to "chink" in terms of offensiveness?
If you want to work behind the scenes to nail Casey's stupid ass to the wall, great. You really should stop posting comments, though, because you are just embarrassing yourself.
Rob
Never heard of Joe Kennedy's moment, but I have read that the founder of what was to become Trans America did the same after getting a stock tip from a cabbie on the way to work. Protected all his clients in the 29 crash.
Never forgot that lesson.
Hope none of you do either.
In 2000 when my B-I-L who drives a dump truck started offering stock tips, I pull all my money from stocks and put them into a boring 6% fund based on T notes. Never lost a dime.
Just pulled 80% of my stock holdings and put them in cash as I am expected a big correction. The dizziness of people feeling rich from using their homes as an ATM while not getting raises is starting to wane and we are already seeing reality at the retail level.
I will eat the lost 6% this year for the money it protects next year.
Hey Sharky,
Thanks for pinpointing the exact Gulch area. I'm new here (+/- 5 years) so haven't got the exact historical location down precisely yet. No way would I ever pay those prices there. Why some people do, I dunno. Proximity to transit? Maybe living there you could get by with one car in a family, but one less (used) car payment won't make up for the prices.
Every conceivable modification to a cinder-block no garage, 2Bd 1 Ba, Kitchen in back Cape Cod known to mankind
Hee hee, gotcha! I actually lived in one of those (not that city, though) and loved it. OK, I could have used a fridge in the frikkin' kitchen instead of out in the add-on laundry in the back. But I was young, single, it was walking distance to the pubs and shopping, bike distance to work. Nice window aircon units. :-) Oh, did I mention it rented for $350/mo? Nothing like the Falls Church boxes these days, where "dramatically overpriced" is an understatement.
My Joe K. moment was exactly in October 2005, and I will never forget it.
I had paid cash for a 3 br 2 ba town home on a lake, with a pool, on the 16th hole at a golf club downtown in 2000. Beautiful and set for life! No mortgage and no car payments. Did not have to work at a W2 adn just worked on my "sweet deals" (not RE).
Enter Florida weather and overnight, I lost everything(!!!) due to the roof failure (HOA did not maintain roof and my RE Inspector did not find the flaws).
Now, a 5 year legal battle with the Insurance Company ensued with me and my son enduring 13 hotels stays, and three hurricanes. I settled with the Insurance Company last July of '06, IN #$%*^& 2001 prices, which was "legally" the damage I suffered.
In the five year legal battle I was expecting everyday to get my money and replace my homestead, whilst fliptards and Real Estate Clerks ran up prices to outer space.
Oct of 05, I got really concerned and I started googling Housing Crash and found HP (which led me here).
That was the day, October 2005, I knew I would never have another home like the one I lost, and the day I started holding people like Casey S. and the REIC responsible for the for the unadulterated speculative greed and the ruination of my home town, Orlando, Florida.
Today, I own a postage stamp pent house, and have a new 30 year mortgage, which can withstand 149 MPH winds, and my taxes are triple what they were in 2001. Oh, and I have a full time looser W2 job, while still working on my "Sweet deals"
The REIC CAN kiss my A$$.
:::Cheerleader mode on:::
PS. Thanks guys for the really great and funny blog, it is so good to laugh about it now that it is behind me.
:::Cheerleader mode off:::
O.k., so if money's flowing out of RE, what will it flow into?
++++++++++++++
The Next Bubble?
Oil and the Alternative Energy sector, which is also oil based, according to ITULIP.com.
In about 2003 I had DEJA MOO, as in I've seen this BULLSHIT before, like in 1989-1990. I couldn't understand why prices kept going up until I caught on to the non existant credit standards in 2004.
I think going short on REITs and long on precious metals and Euro-based stocks and funds may be the way to go at this time.
@flyingmonkeywarrior 6:24
You could pay CASH for a 3br/3ba townhome but couldn't pay for a new roof? You sunk every last cent into buying the house and didn't leave a reserve for unpredictable things like, I dunno, FLORIDA weather? I don't think you can blame Fliptard for the hurricane and inept roof inspection.
p.s. never mind the insurance company. My first assumption about ANY insurance company (house, auto, medical) is that they will find any way they can to not pay on a claim and I better have an interim co-insurance solution should the situation arise (i.e., pay for the damage myself, thus avoiding costly substitute housing expenses, and fight with the insurance company afterward for reimbursement.)
You could pay CASH for a 3br/3ba townhome but couldn't pay for a new roof
_______________
Tried to midigate that with the insurance company, not my roof, it was a 'common area' over 9 other town homes. The insurance company would not replace the roof, and it too another 2 years for the HOA to vote a new roof into the budget. The existing roof was built in 1969 with ZERO up dates, I found out much too late.
I totally blame speculator fliptards and the REIC. My opinion, deal with it.
FMW,
Don't you need to blame bad planning as well?
I had not one moment but two weeks, during which I learned about the housing bubble. November 2005, my one-year job in the new town was changed into a permanent position and my wife and I talked about house buying. These days, I research every big purchase on the web first (and by God, houses are big purchases), so I went online, found patrick.net, and compared its arguments with "real estate always goes up". Comparing rents with realistic ITIs and expecting negative appreciation, it was better to continue renting and to save more for a downpayment later on.
Rob,
I went to the planning and zoning and there was never a CO!!! issued to this community in the 60's, which was not called a condominium, but pud housing. So they fell outside of the jurisdiction of the laws regulating these things, with intent and afore thought. So scammy and sooooo aggravating.
But I fell between the cracks of the system, so took my money last summer, had a mini funeral for the losses and moved on to EN to watch ring side!
So, yes to your question, but they were way down on the list of people I was ad odds with, but Yes.
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